Netflix stock fell more than 9% in pre-market trading after the streaming company released third-quarter guidance that came in below Wall Street expectations. The company projected third-quarter revenue of approximately $12.86 billion, below analysts' forecast of $13 billion, and earnings per share of $0.82, compared with expectations of $0.84. The weaker outlook overshadowed an otherwise solid second-quarter performance, where Netflix reported revenue of $12.56 billion and earnings per share of $0.80, slightly ahead of consensus estimates. The softer forward guidance triggered a sharp selloff in Netflix stock, which has already declined around 40% over the past 12 months. Despite the near-term pressure, the company maintained its full-year 2026 revenue forecast of between $51 billion and $51.4 billion and emphasized its focus on expanding advertising revenue and subscriber reach.
Netflix Reports Q2 Revenue of $12.56 Billion
Netflix reported second-quarter revenue of $12.56 billion, up 13.4% from a year earlier but just below analysts' expectations of $12.58 billion. Revenue growth slowed from the 16.2% recorded in the previous quarter. Earnings per share came in at $0.80, slightly ahead of the consensus estimate of $0.79 and above the $0.73 reported during the same period last year.
Netflix Projects Q3 Revenue Below Wall Street Estimates
Netflix expects third-quarter revenue of approximately $12.86 billion, below Wall Street's forecast of $13 billion. The company also projected earnings per share of $0.82, compared with analyst expectations of $0.84. Netflix held onto its full-year 2026 revenue forecast of between $51 billion and $51.4 billion, largely in line with its previous guidance of $50.7 billion to $51.7 billion. Management acknowledged that the entertainment industry is highly competitive but said the company is focused on delivering better entertainment value, improving its technology platform, and expanding monetization opportunities.
Netflix US and Canada Revenue Grows 10% Year-Over-Year
Netflix's largest market in the United States and Canada recorded 10% year-over-year revenue growth during the second quarter. This was slower growth than the previous four quarters. Latin America was the only major region where growth accelerated compared with the prior quarter.
Netflix Targets $3 Billion in Advertising Revenue for 2026
Netflix now expects generating $3 billion in advertising revenue during 2026 as it expands its lower-priced ad-supported subscription tier. The company pointed out strong advertiser demand for its growing portfolio of live sports and entertainment programming, including the Women's World Cup, football, baseball, and wrestling events.
Netflix CFO Highlights Long-Term Growth Potential
Chief Financial Officer Spencer Neumann told analysts that Netflix reached fewer than 45% of its total addressable households globally and currently accounts for only around 5% of total television viewing. The company believes these figures leave room for future subscriber growth and engagement.
FAQ
Why did Netflix stock fall in pre-market trading?
Netflix stock fell more than 9% in pre-market trading after the company released third-quarter revenue and earnings guidance that came in below Wall Street expectations. The company projected third-quarter revenue of approximately $12.86 billion, below analysts' forecast of $13 billion, and earnings per share of $0.82, compared with expectations of $0.84.
What were Netflix's second-quarter earnings results?
Netflix reported second-quarter revenue of $12.56 billion, up 13.4% from a year earlier but just below analysts' expectations of $12.58 billion. Earnings per share came in at $0.80, slightly ahead of the consensus estimate of $0.79 and above the $0.73 reported during the same period last year.
What is Netflix's advertising revenue target for 2026?
Netflix expects generating $3 billion in advertising revenue during 2026 as it expands its lower-priced ad-supported subscription tier. The company pointed out strong advertiser demand for its growing portfolio of live sports and entertainment programming.
